Tax practitioners continue to count on a dynamic practice

By Julie Chen Allen

For many small businesses, passage of the Small Business Jobs Act on Sept. 27 brought much relief and a timely treat: eight separate tax cuts worth about $12 billion. Meanwhile, higher wage earners and corporate companies, especially those with overseas operations, are among many others waiting anxiously to see which way the ax will fall on further tax cut proposals after mid-term Congressional elections.

For attorneys who have brazenly entered the taxation law practice, they expect nothing less than a bag of exciting challenges ahead.

“The practice of tax law is very dynamic because there are constant changes to the Internal Revenue Code, Treasury regulations and state codes and regulations,” says an alum of the University of Texas School of Law now working as a senior tax consultant at a national accounting firm. (The alum has requested anonymity so he could speak more freely about his work.)

“The first thought, honestly, is that I’d better wrap my brain around it because undoubted the CFO or VP of a client is already aware of this change and will have questions for the engagement team on how the [tax] changes will impact the company,” says the UT alum.

Fortunately, once the initial panic dissipates, most tax attorneys probably will remember the attributes attracting them to this practice – constant change through legislative bodies, administrative and regulatory entities and courts. And, yes, it might help if one is numerically inclined and unfazed by tedium.

“A necessary skill set should include an interest in delving into the complex language of the [tax] Code,” says the UT alum.

In case there’s any doubt about it, the Internal Revenue Code is not simple to interpret. Tax lawyers are confronted with arguably one of the longest and most extensive legal codes they have to frequent. Often, it takes multiple readings and discussions to parse out an educated understanding of the language.

In spite of this, tax practitioners can count on a dynamic practice.

The practice of tax law typically consists of either consulting work or traditional litigation, which might cover tax disputes or interpretation of tax laws to assist clients in compliance during filings. In an accounting firm, for example, tax consultants aim to develop new tax-saving opportunities for clients based on a current/prospective filing position or in amending their returns to receive benefit from an alternate tax position. Because of the federal and state budget climate, much of the consulting work also includes audit defense and communications with the Internal Revenue Service or state tax agency. 

Tax lawyers might also assist clients through an audit or protest phase with an administrative agency that has its own compliance procedures. Practitioners point out that, like many areas of legal practice, tax law certainly also allows those who like to litigate to represent clients through civil litigation in court — locally, nationally or even internationally.

“If you happen to practice law in an accounting firm, you might want to have even an elementary background in accounting and to familiarize yourself with corporate financial statements,” suggests the UT alum.

Law students who are interested in this area of practice might want to start reading the Wall Street Journal if they lack such familiarity with financial concepts and terminology.

Due to the current budget crisis, some tax lawyers may find the administrative agencies are pushing back much more on taxpayer’s refund claims, and that in turn can create more work for the attorneys and delays for filers, according to the UT alum. 

The bright side of that is, there will always be work for tax attorneys.

Who would have thought such a quiet vein of practice is robustly alive and pumping steady beneath the uncertain market of legal hiring?

With requisite Senate votes on further tax proposals stalled until after the November elections, tax lawyers are standing by with high anticipation to see for whom the tax bell shall toll.